Revitalizing the Golden State

What Legalization Over Deportation Could Mean to California and Los Angeles County

Dr. Raúl Hinojosa-Ojeda and Marshall Fitz on why mimicking Arizona’s goal of mass expulsion would be economically self-destructive to California.

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California is home to nearly 10 million immigrants, more than one-quarter of the state’s population. Of those, 2.7 million are undocumented, and the vast majority of them have been living in the United States for more than 10 years. California’s immigrant contributions to the Golden State cannot be overstated. From Cesar Chavez, the pioneering agricultural labor-rights leader in the 20th century to Sergei Brin, the Russian entrepreneur behind one of the 21st century’s most revolutionary companies, Google Inc., the foreign born and their descendants are woven into the state’s cultural and economic fabric.

Still, that reality has not prevented some Californians, frustrated with our broken federal immigration system, to call for an Arizona-style “papers please” approach. In fact, a Tea Party activist and former chair of the Sonoma County Republican Party is currently organizing a petition drive to put a similar measure before the California voters on the next ballot.

California is no stranger to anti-immigrant sentiment. This immigrant-rich state has grappled with issues related to legal and illegal immigration for decades. In 1994, then-Gov. Pete Wilson staked his political fortunes to a measure similar to S.B. 1070, Arizona’s immigration enforcement law. The Wilson-backed measure—known as Proposition 187—died in the courts but triggered a political backlash against the state’s Republican establishment that persists to this day.

Nonetheless, some state legislators in California appear willing to repeat the mistakes of 1994 by gearing up to push S.B. 1070-style legislation without considering the economic and fiscal consequences of such a move. The stated goal of this new wave of state-based enforcement legislation is to trigger a mass exodus of undocumented immigrants, by making “attrition through enforcement” the policy of state and local government agencies. The threshold question that proponents of S.B.1070-style legislation have failed to answer is whether that goal serves the economic interests of the state’s constituents.

The Center for American Progress and the Immigration Policy Center recently released a report answering that question as it related to Arizona. Our economic analysis conclusively demonstrated that, if successful, S.B. 1070 would have grave consequences for the state’s economy. In this report, we train our focus on California, with a separate look at Los Angeles County. We assess the economic ramifications to the state and county by answering the following two questions:

  • If legislation designed to drive all undocumented immigrants from California actually accomplished that goal, what effect would it have on the state’s econ- omy and the economy of Los Angeles County?
  • Conversely, what would the impact be on the California and Los Angeles County economies if undocumented immigrants acquired legal status?

Our analysis finds that the economic and fiscal consequences of widespread deportation for California and L.A. County would be even more devastating than in Arizona. When undocumented workers are taken out of the economy, the jobs they support through their labor, their consumption, and their tax payments disappear as well. Particularly during a time of profound economic uncertainty, the type of dislocation envisioned by harsh immigration enforcement policies runs directly counter to the public interest.

Mass deportation versus mass legalization

Conversely, our analysis shows that legalizing the undocumented population in California and L.A. County would yield significant economic benefits. Based on the historical results of the last legalization program under the Immigration Reform and Control Act of 1986, a similar program would increase wages not only for immigrants but also for their native-born co-workers. This would generate more tax revenue and more consumer and business spending, supporting additional jobs throughout the state and L.A. County economies.

Our report estimates and compares the short-term shock to the state and county economies that would be immediately felt from a significant change in policy—deportation or legalization. Our analysis evaluates the changes in economic output, employment levels, and tax contributions on the economies of California and, more specifically, Los Angeles County arising from these divergent policy approaches.

This analysis demonstrates unequivocally that undocumented immigrants don’t simply “fill” jobs—they create jobs. Through the work they perform, the money they spend, and the taxes they pay, undocumented immigrants sustain the jobs of many other workers in the U.S. economy, immigrants and native-born alike. Were undocumented immigrants to suddenly vanish, the jobs of many Americans in California and L.A. County would vanish as well. By contrast, were undocumented immigrants to acquire legal status, their wages and productivity would increase, they would spend more in our economy and pay more in taxes, and new jobs would be created. (see Figures 1 and 2)

Boosting jobs, boosting tax revenues

In short, mimicking Arizona’s goal of mass expulsion would be economically self-destructive to the California economy and the L.A. county economy. California went down that road in the early 1990s and accomplished nothing except to unleash a political backlash from the fastest growing demographic group in the state and nation. California should opt instead for the more forward-looking approach that puts all workers on a legal, even footing. That progressive strategy could serve as a costless stimulus to the economy that would improve the state’s fiscal balances.

Dr. Raúl Hinojosa-Ojeda is the founding director of the North American Integration and Development Center and Marshall Fitz is Director of Immigration Policy at American Progress.

Read the full report (pdf)

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Marshall Fitz

Senior Fellow